A now profitable Tesla motors hopes that a $49,900 Model S sedan will send its profit soaring to even greater heights.

The company is also launching the Roadster Sport model in 2011. (Source: Tesla Motors)

After years of losses, the company's persistence is finally paying off

Luxury electric car maker Tesla Motors
appears to be firing on all cylinders. Despite a painful couple
of years that saw the company cutting back to survive the recession,
the company emerged stronger than ever. Thanks to a new
partnership
with Daimler, additional engineering, distribution, and marketing
resources were gained. And most importantly, Tesla finally
began to deliver
vehicles.

Now the company can celebrate an important
milestone -- its first
profit. After many months in the red, July saw the company
in the black, making $1M USD in profit on $20M USD in revenue.
The profits came thanks to a record 109 cars shipped in the month.
Manufacturing cost cuts also helped to enable the profit.

Tesla
Chief Executive Elon Musk comments, "There is strong demand for
a car that is unique in offering high performance with a clean
conscience. Customers know that in buying the Roadster they are
helping fund development of our mass market electric cars."

Tesla,
like many R&D driven greentech firms, offered a target date for
profitability. However, it appears that Tesla is one of the few
to actually deliver on such a date -- having projected
a profit in "mid-2009".

The Tesla Roadster
undeniably features the most attractive production electric vehicle
body design to date. They also offer fittingly sporty
performance and a utilitarian 244-mile range. In other words,
while expensive, the Roadsters do deliver a strong experience.
Currently, the Roadsters retail for a base price of $109,000.

Tesla
has borrowed
$465M USD from the U.S. Department of Energy, to produce a luxury
sedan reachable by more customers at a price point of $49,900.
This new model will be called the Model
S.

The company is also working with Daimler to create
electric versions of the popular Smart car. Late this year, the
company will deploy a fleet of the 1,000 of the electrified
ultra-compact vehicles. Tesla is also set to deploy a
higher-performance version of the Roadster -- the Roadster Sport --
in 2011.

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This article is over a month old, voting and posting comments is disabled

To be more specific, what investor in their right mind would loan a company a half-billion dollars with a hope of producing a profit of $1M?

Maybe it makes sense in a green libtard world, but from a business perspective, Tesla stinks. Fortunately for them, a good portion of Washington, as well as American citizens, have completely lost their minds.

quote: To be more specific, what investor in their right mind would loan a company a half-billion dollars with a hope of producing a profit of $1M?

Did you even read the article? The loan was for producing the Model S, which is NOT YET being sold. Tesla hopes to make a much larger profit from those cars.

Also, you don't seem to understand how investment works. Tesla is still pretty much a young business. When investors invest in a company, they try to estimate the potential of the company, and not really what the current situation is. By your logic, the people who invested in Google in the 90s were morons, since the company didn't even have a profit (unless you count a loss as a negative profit). Yet, they ended up making billions.

And you don't seem to understand what investment is. In real capitalism, a company has to convince private earners to forsake immediate consumption and voluntarily loan them, and not others, their savings(production) at interest in hopes of far greater deferred consumption. Key things to note in that description: voluntary loans and competing with other businesses for those loans. Your idea of "investment" doesn't have those qualities. If politicians truly believed in the profit potential of a company, they would invest their OWN earnings into it like everyone else. Instead, they dole out someone's else's for in exchange for campaign contributions. Why? Because they can't directly keep taxes, but they can trade it for a favor that accomplishes that. How can you say that model will result in more good investments than bad?

And, as always on DailyTech, most of the users seem to understand this, but praise the choices they like as if they somehow make up for the thousands of bad ones. It's idiotic, when you see a critic of programs like this, they're not critiquing the choice relative to others, they're critiquing the the whole bloody model and believe, correctly, that far better investment choices would be made on the whole if that tax money had stayed in the hands of the people who earned it.

Finally someone with a clue. Well-stated - far better than I could have said myself.

I personally think the whole notion of capitalism is falling apart because everyone wants the perceived quick-fix of taxpayer dollar handouts. The goverment is handing out money like it's going out of style and the line has formed of those wanting to cash in.

Instead of this, we should go back towards greater economic efficiency, which means professionals who actually research the value of potential investments and plunk down money for ventures with merit. If Tesla needed a half-billion, they should have been able to make a case to private investors in any one of many forms, and they could have easily raised the money. But instead this rational process is short-circuited and at the same time public debt continues to skyrocket. Is this America?

The problem with being pro-capitalist and electing those who advocate it in the US these days is that you get a lot of unwanted extras; social conservatism, religious evangelism, and an altogether idiotic notion that while government should stay out of our finances it should meddle more and more with the social aspects of our lives.

I agree, but the reality of certain "bad" politicians shouldn't dissuade you from still striving for the correct principles.

And quite honestly, the harm done during the Bush administration by his religious views will probably be dwarfed by the spending and bailing out being carried out by the current administration. That debt ain't going to pay itself back.

I have no idea why you were rated down. I would rate up, but I can't so hopefully this pull attention.

However, I would add to your description that some model for funding projects that remove externalities should be in existence.

Purely capitalism based loaning will simply reward companies who can foster costs on general society in an indirect method. IE, Air pollution shortens people lives and this cost savings would never be part of Tesla's bottom line.

And you don't seem to understand what government investment is. One of the roles of government is to do what private industry can't. NASA is one of those things. So was the transcontinental railroad. The US government had to give land to the railroads which they then sold to pay for building the railroads. Railroads which were critical for this country to become what we know it as today. Public Education is another function. Public education pays no direct returns what-so-ever but yet it is critical to a modern democracy.

The government is investing in Tesla in order to encourage a new, currently unprofitable technology, in the hopes that eventually the technology will become cheaper, more widespread, and profitable. It may or may not work, but history shows the practice can be very useful.

The problem is that the potential public benefit of the goverment sponsoring Tesla is not clear. I don't see how a small niche manufacturer of expensive cars is going to begin to solve any kind of energy problems we face in this country.

You can't really compare Tesla to the public benefit of the transcontinental railroad, the US highway system, or similar other investments. That's absurd.

What I do see is the potential for some of the ultra-rich to get even more rich due to government handouts at the expense of the public debt. We are all suckers who allow that to happen.

When the government was investing in the railroads, it was also unclear as to whether that was a good investment or not. Instead of making this a huge history lesson, I encourage you to look into what happened in the US with canal building, and then the railroad industry.

Is Tesla really a bad investment? That will not be determined for a long while, most likely. But who knows... maybe Tesla will contract out their battery making to a manufacturer ( using the provided gov't money ), and the battery manufacturer will discover a new way to make batteries thus eliminating our dependence on fossil fuels.

Point is... no one, including Warren Buffet ( who is probably the most successful investor ) really knows whether something is a good investment or not. Some people are better than others, but no one is 100% correct.

quote: What I do see is the potential for some of the ultra-rich to get even more rich due to government handouts at the expense of the public debt.

What I see is that the ultra-rich are afraid that their massive wealth growth over the last 9 years is about to slow down, and the benefits will now target the middle and lower classes... but that's another discussion. ;)

You are failing to see the forest through the trees. Are you really trying to be dense or does it come naturally? I used the transcontinental to demonstrate the purpose and benefits of government investments. Their is obviously a huge difference in scale and impact between Tesla and the railroads.

The investment in Tesla is one of many in the energy and transportation field. The government is investing money in numerous energy producing schemes, be it wind, solar, or whatever. Much less known are investments in infrastructure (power grid). As much as I hated Bush, he was correct about our power grid. It needs to be upgraded. With Tesla the government is encouraging improvements in non-gas powered vehicles. I also seem to remember money going to hydrogen car research. Obviously the government is investing in multiple technologies in the hope that one or more bears fruit.

Will some people get rich off this? Yes. Welcome to reality. Unfortunately life is not fair and that's just how it works. And to go back to the railroad example, along with being very beneficial to the country it too made some people extremely rich.

quote: The government is investing in a future technology. Progress is being sponsored right before your eyes

Do you think this is an appropriate role that the Framers envisioned for the federal government? Picking and choosing certain companies/technologies to get behind, at the exclusion of others? Providing very large loans without taking an equity stake? Is this really an appropriate use of the public debt?

The US government is here for the benefit of it's people. They make hard choices. IE, civil war, WW I&II, etc were all unpopular by the people, yet can you say the world isn't better off without these wars.

The bottom line is, this is the right choice, EVs are the future. I'm just sad they spent Billions on GM/Chyser as opposed to Tesla's measly 500 million.